NEW YORK, Sept 12 (Askume) – Oil prices rose nearly 3% on Thursday as producers assessed the damage to production in the U.S. Gulf of Mexico after Hurricane Francine devastated offshore oil fields and was later declared a tropical storm.
UBS analysts estimateA storm that hit southern Mississippi early Thursday disrupted 1.5 million barrels of production in the Gulf of Mexico.
U.S. West Texas Intermediate crude futures were up $1.91 at $69.22 a barrel at 1:09 p.m. ET (1709 GMT). Brent crude futures rose $1.70, or 2.4%, to $72.31 a barrel.
Both contracts rose more than 2% on Wednesday as the company evacuated more than 171 offshore platforms due to the Francine incident. UBS analysts said production in the Gulf of Mexico is expected to fall by about 50,000 barrels per day this month due to the oil supply disruption.
However, some analysts have warned that Francine’s impact could be short-lived as it weakens after making landfall in Louisiana on Wednesday night. StoneX analyst Alex Hodes told clients in a note that this could shift the oil market’s focus to the lack of global demand.
Oil and fuel export ports from south to central Texas reopened on Thursday and refinery work also increased.
Concerns about weak global oil demand, particularly from top importer China, have weighed on oil prices in recent months. Brent crude futures closed at a three-year low on Tuesday after the OPEC+ producer group cut its forecast for annual demand growth for a second consecutive month.
The International Energy Agency on Thursday released its demand growth forecast for 2024.It was cut by more than 7% to 900,000 barrels per day, citing weak demand in China and weak growth elsewhere .
The United States, the largest oil consumer, is also showing signs of weakening demand. Data released by the US Energy Information Administration (EIA) on Wednesday showed that the country’s oil inventories rose last week due to higher crude oil imports, lower exports and lower fuel demand .
US gasoline prices have fallen due to weak demand and ample supply, analysts sayis heading towards a three-year low . US gasoline consumption accounts for about 9% of global oil demand.
